SQE1 (Solicitors Qualifying Examination) · Business law and practice

Company finance, charges and share capital

13 practice questions, each with the answer and an explanation.

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Random questions from this topic, one at a time. You see the answer and the explanation straight after each one.

All 13 questions

  1. A company grants a charge over its factory to a bank on 3 March. By which date must the charge be delivered to Companies House for registration under the Companies Act 2006?
  2. Which feature most clearly indicates that a charge over stock and receivables is a floating charge?
  3. A company with floating charge assets goes into liquidation. After preferential creditors, which sum is set aside before the floating charge holder is paid, for a floating charge created after 6 April…
  4. Directors of Larch Ltd place the company into administration. What is the principal effect on its creditors?
  5. Eighteen months before it entered administration, an insolvent company sold a van worth £15,000 to its director's brother for £1,000. The company could not pay its debts at the time. What is the posit…
  6. Nine months before going into liquidation, an insolvent company repaid in full an unsecured loan from an unconnected supplier, hoping to preserve the relationship. Can the liquidator challenge this as…
  7. Under what circumstances may a director be ordered to contribute to a company's assets for wrongful trading under section 214 of the Insolvency Act 1986?
  8. A creditor serves a statutory demand for £2,000 on a company, which ignores it for 21 days. What follows under section 123 of the Insolvency Act 1986?
  9. What is the maximum period for which a person may be disqualified from acting as a director under the Company Directors Disqualification Act 1986?
  10. The directors of Mole Ltd, a private company with one class of shares, wish to issue new shares to a new investor. The articles are silent on allotment. What authority do the directors need under the…
  11. Mole Ltd issues new ordinary shares for cash. Existing shareholders have not disapplied their statutory rights. What must the company do first?
  12. A shareholder lodges a share transfer with a private company. The directors do not wish to register it. What must they do under the Companies Act 2006?
  13. A member of a private company alleges that its affairs are being run in a manner unfairly prejudicial to the members' interests. Which provision gives the member a remedy?

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